Sustainable Reimbursements: Towards a Unified Framework for Pricing Drugs with Significant Uncertainties

Arbeitspapier

Recent political events have thrust the bulk negotiation of drug prices by Medicare and Medicaid back into the spotlight. Yet, even if politically feasible, there is no clear framework for negotiating prices of new drugs with uncertain target populations—for example, due to imprecise estimates or off-label use—or uncertain clinical effects—for example, due to heterogeneous patient response. We create such a framework using two-price programs developed in the economics of procurement literature. This framework delivers new payment strategies, and unifying them with theoretical advances in pharmaceutical reimbursement like capitation and value-based pricing. Two-price programs substantially reduce uncertainty for both payers and pharmaceutical companies, while still creating financial incentives for those companies that innovate and create value for patients.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6846

Classification and Topics

• Classification: Wirtschaft ; National Government Expenditures and Health ; Analysis of Health Care Markets ; Health: Government Policy; Regulation; Public Health

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chassang, Sylvain ; Mantua, Valentina ; Snowberg, Erik ; Xoxi, Entela ; Pani, Luca
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/174969
• Last update: 10.03.2025, 11:42 AM CET